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About RGA

Since its launch in 1973, RGA has steadily grown to become one of the world's largest and most respected life and health reinsurers, recognized for its superior risk management expertise, innovative product design, and dedicated client focus.

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Reinsurance Group of America Reports Second Quarter Results
  • Net income of $5.02 per diluted share
  • Adjusted operating income* of $4.00 per diluted share
  • ROE 6.3% and adjusted operating ROE* 5.7% for the trailing twelve months
  • Quarterly shareholder dividend raised 4% to $0.73
  • Global estimated COVID-19 impacts of approximately $130 million1 for the second quarter

ST. LOUIS--(BUSINESS WIRE)--Aug. 3, 2021-- Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported second quarter net income of $344 million, or $5.02 per diluted share, compared with $158 million, or $2.48 per diluted share, in the prior-year quarter. Adjusted operating income* totaled $274 million, or $4.00 per diluted share, compared with $87 million, or $1.36 per diluted share, the year before. Net foreign currency fluctuations had a favorable effect of $0.16 per diluted share on net income and $0.12 per diluted share on adjusted operating income as compared with the prior year.

 

 

Quarterly Results

 

Year-to-Date Results

($ in millions, except per share data)

 

2021

 

2020

 

2021

 

2020

Net premiums

 

$

3,098

 

 

$

2,790

 

 

$

6,012

 

 

$

5,609

 

Net income

 

344

 

 

158

 

 

483

 

 

70

 

Net income per diluted share

 

5.02

 

 

2.48

 

 

7.06

 

 

1.11

 

Adjusted operating income*

 

274

 

 

87

 

 

190

 

 

176

 

Adjusted operating income per diluted share*

 

4.00

 

 

1.36

 

 

2.78

 

 

2.78

 

Book value per share

 

197.72

 

 

184.78

 

 

 

 

 

Book value per share, excluding accumulated other comprehensive income (AOCI)*

 

138.29

 

 

128.82

 

 

 

 

 

Total assets

 

88,944

 

 

80,729

 

 

 

 

 

*

See ‘Use of Non-GAAP Financial Measures’ below

1

COVID-19 impact estimates include mortality and morbidity claims of approximately $168 million with offsetting impacts from longevity of approximately $38 million.

In the second quarter, consolidated net premiums totaled $3.1 billion, an increase of 11% over last year’s second quarter, with a favorable net foreign currency effect of $124 million. Compared with the year-ago period, excluding spread-based businesses and the value of associated derivatives, second quarter investment income increased 26%, reflecting a 10% higher average asset balance and strong variable investment income. Average investment yield increased to 4.64% in the second quarter from 4.07% in the prior year, primarily due to higher variable investment income.

The effective tax rate this quarter was 28.5% on pre-tax income. The effective tax rate was 24.0% on pre-tax adjusted operating income for the quarter, within the expected range of 23% to 24%.

Anna Manning, President and Chief Executive Officer, commented, “We are very pleased with the Company’s strong performance in the second quarter, as the earnings contribution was broad-based by geography and lines of business, the impact of COVID-19 was significantly reduced, and our investment results were very favorable. Notably, our U.S. Traditional segment had a very good quarter, and our GFS business performed extremely well across all our regions and lines of business. Reported premium growth was very good, organic growth was solid, and new business momentum has picked up and is encouraging. We deployed approximately $200 million of capital into in-force transactions, and the pipeline is active.

“Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $1.2 billion. We expect our results to continue to reflect some additional COVID-19 claims, but at manageable and decreasing levels. We expect our underlying earnings power to be sustained and to continue to deliver attractive financial results over time.”

SEGMENT RESULTS

U.S. and Latin America

Traditional

 

Quarterly Results

($ in millions)

2021

 

2020

Net premiums

$

1,578

 

 

$

1,454

 

Pre-tax income (loss)

135

 

 

(158)

 

Pre-tax adjusted operating income (loss)

134

 

 

(165)

 

  • Results reflected COVID-19 claim costs of approximately $57 million; non-COVID-19 individual mortality experience was in line with expectations.
  • Group and Individual Health experience was favorable.
  • Strong variable investment income due to favorable limited partnership performance and real estate joint venture realizations.

Financial Solutions

 

Quarterly Results

($ in millions)

2021

 

2020

Asset-Intensive:

 

 

 

Pre-tax income

$

163

 

 

$

93

 

Pre-tax adjusted operating income

126

 

 

63

 

Capital Solutions:

 

 

 

Pre-tax income

23

 

 

24

 

Pre-tax adjusted operating income

23

 

 

24

 

  • Asset-Intensive results were very strong due to favorable overall experience, transaction and other fees, and favorable longevity experience.
  • Capital Solutions results were in line with expectations.

Canada

Traditional

 

Quarterly Results

($ in millions)

2021

 

2020

Net premiums

$

301

 

 

$

254

 

Pre-tax income

32

 

 

44

 

Pre-tax adjusted operating income

34

 

 

40

 

  • Foreign currency exchange rates had a favorable effect of $34 million on net premiums.
  • Results reflected approximately $21 million of COVID-19 claim costs; non-COVID-19 experience was favorable.
  • Foreign currency exchange rates had a favorable effect of $3 million on pre-tax income and pre-tax adjusted operating income.

Financial Solutions

 

Quarterly Results

($ in millions)

2021

 

2020

Pre-tax income

$

4

 

 

$

4

 

Pre-tax adjusted operating income

4

 

 

4

 

  • Results were in line with expectations.
  • Foreign currency exchange rates had an immaterial effect on pre-tax income and a favorable effect of $1 million on pre-tax adjusted operating income.

Europe, Middle East and Africa (EMEA)

Traditional

 

Quarterly Results

($ in millions)

2021

 

2020

Net premiums

$

433

 

 

$

352

 

Pre-tax income (loss)

(12)

 

 

16

 

Pre-tax adjusted operating income (loss)

(12)

 

 

16

 

  • Foreign currency exchange rates had a favorable effect of $47 million on net premiums.
  • Results reflected approximately $35 million of COVID-19 claim costs, primarily from the U.K. and South Africa; non-COVID-19 experience was favorable.
  • Foreign currency exchange rates had an adverse effect of $4 million on pre-tax loss and pre-tax adjusted operating loss.

Financial Solutions

 

Quarterly Results

($ in millions)

2021

 

2020

Pre-tax income

$

83

 

 

$

98

 

Pre-tax adjusted operating income

83

 

 

79

 

  • Results reflected favorable longevity benefits.
  • Foreign currency exchange rates had a favorable effect of $10 million on pre-tax income and $9 million on pre-tax adjusted operating income.

Asia Pacific

Traditional

 

Quarterly Results

($ in millions)

2021

 

2020

Net premiums

$

616

 

 

$

607

 

Pre-tax income (loss)

(12)

 

 

47

 

Pre-tax adjusted operating income (loss)

(12)

 

 

47

 

  • Foreign currency exchange rates had a favorable effect of $30 million on net premiums.
  • Results reflected COVID-19 claims of approximately $55 million, of which approximately $51 million was from India; non-COVID-19 experience in Asia was favorable.
  • Australia reported a modest profit.
  • Foreign currency exchange rates had an adverse effect of $1 million on pre-tax loss and pre-tax adjusted operating loss.

Financial Solutions

 

Quarterly Results

($ in millions)

2021

 

2020

Net premiums

$

48

 

 

$

31

 

Pre-tax income

31

 

 

26

 

Pre-tax adjusted operating income

20

 

 

12

 

  • Results reflected favorable experience on existing treaties and contributions from recent transactions.
  • Foreign currency exchange rates had an immaterial effect on pre-tax income and pre-tax adjusted operating income.

Corporate and Other

 

Quarterly Results

($ in millions)

2021

 

2020

Pre-tax income

$

35

 

 

$

1

 

Pre-tax adjusted operating loss

(39)

 

 

(11)

 

  • Pre-tax income reflects gains associated with portfolio repositioning and the sale of RGA's Dutch life insurance company, Leidsche, that was announced in 2020, in addition to unrealized gains on limited partnership investments.
  • Pre-tax adjusted operating loss was higher than the average run rate for the quarter, primarily due to lower investment income.

Capital Management

Todd C. Larson, Senior Executive Vice President and Chief Financial Officer, commented, “Recognizing our strong underlying business fundamentals, our excess capital position, and the expectation of reducing levels of COVID-19 costs going forward, we have increased the dividend and are lifting the existing suspension on share repurchases.”

Dividend Declaration

Effective August 3, 2021, the board of directors increased the quarterly dividend 4%, to $0.73 from $0.70, payable August 31, 2021, to shareholders of record as of August 17, 2021.

Earnings Conference Call

A conference call to discuss second quarter results will begin at 10 a.m. Eastern Time on Wednesday, August 4. Interested parties may access the call by dialing 800-458-4121 (domestic) or 323-794-2093 (international). The access code is 9949193. A live audio webcast of the conference call will be available on the Company’s Investor Relations website at www.rgare.com. A replay of the conference call will be available at the same address for 90 days following the conference call.

The Company has posted to its website an earnings presentation and a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio. Additionally, the Company posts periodic reports, press releases and other useful information on its Investor Relations website.

Use of Non-GAAP Financial Measures

RGA uses a non-GAAP financial measure called adjusted operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that adjusted operating income, on a pre-tax and after-tax basis, better measures the ongoing profitability and underlying trends of the Company’s continuing operations, primarily because that measure excludes substantially all of the effect of net investment related gains and losses, as well as changes in the fair value of certain embedded derivatives and related deferred acquisition costs. These items can be volatile, primarily due to the credit market and interest rate environment, and are not necessarily indicative of the performance of the Company’s underlying businesses. Additionally, adjusted operating income excludes any net gain or loss from discontinued operations, the cumulative effect of any accounting changes, tax reform and other items that management believes are not indicative of the Company’s ongoing operations. The definition of adjusted operating income can vary by company and is not considered a substitute for GAAP net income.

Book value per share excluding the impact of AOCI is a non-GAAP financial measure that management believes is important in evaluating the balance sheet in order to ignore the effects of unrealized amounts primarily associated with mark-to-market adjustments on investments and foreign currency translation.

Adjusted operating income per diluted share is a non-GAAP financial measure calculated as adjusted operating income divided by weighted average diluted shares outstanding. Adjusted operating return on equity is a non-GAAP financial measure calculated as adjusted operating income divided by average stockholders’ equity excluding AOCI. Similar to adjusted operating income, management believes these non-GAAP financial measures better reflect the ongoing profitability and underlying trends of the Company’s continuing operations, they also serve as a basis for establishing target levels and awards under RGA’s management incentive programs.

Reconciliations from GAAP net income, book value per share, net income per diluted share and average stockholders’ equity are provided in the following tables. Additional financial information can be found in the Quarterly Financial Supplement on RGA’s Investor Relations website at www.rgare.com in the “Financial Information” section.

About RGA

Reinsurance Group of America, Incorporated (RGA), a Fortune 500 company, is among the leading global providers of life reinsurance and financial solutions, with approximately $3.5 trillion of life reinsurance in force and assets of $88.9 billion as of June 30, 2021. Founded in 1973, RGA today is recognized for its deep technical expertise in risk and capital management, innovative solutions, and commitment to serving its clients. With headquarters in St. Louis, Missouri, and operations around the world, RGA delivers expert solutions in individual life reinsurance, individual living benefits reinsurance, group reinsurance, health reinsurance, facultative underwriting, product development, and financial solutions. To learn more about RGA and its businesses, visit the Company’s website at www.rgare.com.

Cautionary Note Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, among others, statements relating to projections of the future operations, strategies, earnings, revenues, income or loss, ratios, financial performance and growth potential of the Company. Forward-looking statements often contain words and phrases such as “intend,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “should,” “believe” and other similar expressions. Forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance, and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

The effects of the COVID-19 pandemic and the response thereto on economic conditions, the financial markets and insurance risks, and the resulting effects on the Company’s financial results, liquidity, capital resources, financial metrics, investment portfolio and stock price, could cause actual results and events to differ materially from those expressed or implied by forward-looking statements. Further, any estimates, projections, illustrative scenarios or frameworks used to plan for potential effects of the pandemic are dependent on numerous underlying assumptions and estimates that may not materialize. Additionally, numerous other important factors (whether related to, resulting from or exacerbated by the COVID-19 pandemic or otherwise) could also cause results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: (1) adverse changes in mortality, morbidity, lapsation or claims experience, (2) inadequate risk analysis and underwriting, (3) adverse capital and credit market conditions and their impact on the Company’s liquidity, access to capital and cost of capital, (4) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (7) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (8) the effect of the Company parent’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, (9) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (10) the impairment of other financial institutions and its effect on the Company’s business, (11) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (12) market or economic conditions that adversely affect the value of the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities, that in turn could affect regulatory capital, (13) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (14) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (15) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (16) the stability of and actions by governments and economies in the markets in which the Company operates, including ongoing uncertainties regarding the amount of U.S. sovereign debt and the credit ratings thereof, (17) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers and others, (18) financial performance of the Company’s clients, (19) the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where the Company or its clients do business, (20) competitive factors and competitors’ responses to the Company’s initiatives, (21) development and introduction of new products and distribution opportunities, (22) execution of the Company’s entry into new markets, (23) integration of acquired blocks of business and entities, (24) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data and intellectual property stored on such systems, (25) adverse litigation or arbitration results, (26) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (27) changes in laws, regulations, and accounting standards applicable to the Company or its business, (28) the effects of the Tax Cuts and Jobs Act of 2017 may be different than expected and (29) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission (“SEC”).

Forward-looking statements should be evaluated together with the many risks and uncertainties that affect the Company’s business, including those mentioned in this document and described in the periodic reports the Company files with the SEC. These forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update these forward-looking statements, even though the Company’s situation may change in the future. For a discussion of these risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to see Item 1A - “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as may be supplemented by Item 1A - “Risk Factors” in the Company’s subsequent Quarterly Reports on Form 10-Q.

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Adjusted Operating Income

(Dollars in millions, except per share data)

 

(Unaudited)

Three Months Ended June 30,

 

2021

 

2020

 

 

 

Diluted
Earnings Per
Share

 

 

 

Diluted
Earnings Per
Share

Net income

$

344

 

 

 

$

5.02

 

 

 

$

158

 

 

 

$

2.48

 

 

Reconciliation to adjusted operating income:

 

 

 

 

 

 

 

Capital (gains) losses, derivatives and other, included in investment related gains/losses, net

(82

)

 

 

(1.19

)

 

 

23

 

 

 

0.35

 

 

Capital (gains) losses on funds withheld, included in investment income, net of related expenses

(1

)

 

 

(0.01

)

 

 

(2

)

 

 

(0.03

)

 

Embedded derivatives:

 

 

 

 

 

 

 

Included in investment related gains/losses, net

1

 

 

 

0.01

 

 

 

(85

)

 

 

(1.33

)

 

Included in interest credited

(2

)

 

 

(0.03

)

 

 

6

 

 

 

0.09

 

 

DAC offset, net

(1

)

 

 

(0.01

)

 

 

(16

)

 

 

(0.25

)

 

Investment (income) loss on unit-linked variable annuities

(2

)

 

 

(0.03

)

 

 

(12

)

 

 

(0.19

)

 

Interest credited on unit-linked variable annuities

2

 

 

 

0.03

 

 

 

12

 

 

 

0.19

 

 

Interest expense on uncertain tax positions

3

 

 

 

0.04

 

 

 

3

 

 

 

0.05

 

 

Non-investment derivatives and other

(12

)

 

 

(0.18

)

 

 

3

 

 

 

0.05

 

 

Uncertain tax positions and other tax related items

24

 

 

 

0.35

 

 

 

(3

)

 

 

(0.05

)

 

Adjusted operating income

$

274

 

 

 

$

4.00

 

 

 

$

87

 

 

 

$

1.36

 

 

 

 

 

 

 

 

 

 

(Unaudited)

Six Months Ended June 30,

 

2021

 

2020

 

 

 

Diluted
Earnings Per
Share

 

 

 

Diluted
Earnings Per
Share

Net income

$

483

 

 

 

$

7.06

 

 

 

$

70

 

 

 

$

1.11

 

 

Reconciliation to adjusted operating income:

 

 

 

 

 

 

 

Capital (gains) losses, derivatives and other, included in investment related gains/losses, net

(261

)

 

 

(3.82

)

 

 

(28

)

 

 

(0.46

)

 

Capital (gains) losses on funds withheld, included in investment income, net of related expenses

(2

)

 

 

(0.03

)

 

 

(4

)

 

 

(0.06

)

 

Embedded derivatives:

 

 

 

 

 

 

 

Included in investment related gains/losses, net

(53

)

 

 

(0.77

)

 

 

198

 

 

 

3.13

 

 

Included in interest credited

(26

)

 

 

(0.38

)

 

 

15

 

 

 

0.24

 

 

DAC offset, net

8

 

 

 

0.12

 

 

 

(85

)

 

 

(1.34

)

 

Investment (income) loss on unit-linked variable annuities

(1

)

 

 

(0.01

)

 

 

1

 

 

 

0.02

 

 

Interest credited on unit-linked variable annuities

1

 

 

 

0.01

 

 

 

(1

)

 

 

(0.02

)

 

Interest expense on uncertain tax positions

5

 

 

 

0.07

 

 

 

6

 

 

 

0.09

 

 

Non-investment derivatives and other

(3

)

 

 

(0.04

)

 

 

1

 

 

 

0.02

 

 

Uncertain tax positions and other tax related items

39

 

 

 

0.57

 

 

 

3

 

 

 

0.05

 

 

Adjusted operating income

$

190

 

 

 

$

2.78

 

 

 

$

176

 

 

 

$

2.78

 

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Effective Income Tax Rates

(Dollars in thousands)

 

(Unaudited)

Three Months Ended June 30, 2021

 

Pre-tax Income
(loss)

 

Income Taxes

 

Effective Tax
Rate

GAAP income

$

481,891

 

 

 

$

137,554

 

 

 

28.5

%

Reconciliation to adjusted operating income:

 

 

 

 

 

Capital (gains) losses, derivatives and other, included in investment related gains/losses, net

(103,446

)

 

 

(62,313

)

 

 

 

Capital (gains) losses on funds withheld, included in investment income, net of related expenses

(1,506

)

 

 

(316

)

 

 

 

Embedded derivatives:

 

 

 

 

 

Included in investment related gains/losses, net

1,548

 

 

 

325

 

 

 

 

Included in interest credited

(2,998

)

 

 

(630

)

 

 

 

DAC offset, net

(2,417

)

 

 

(507

)

 

 

 

Investment (income) loss on unit-linked variable annuities

(2,163

)

 

 

(454

)

 

 

 

Interest credited on unit-linked variable annuities

2,163

 

 

 

454

 

 

 

 

Interest expense on uncertain tax positions

3,193

 

 

 

670

 

 

 

 

Non-investment derivatives and other

(15,223

)

 

 

(3,196

)

 

 

 

Uncertain tax positions and other tax related items

 

 

 

15,057

 

 

 

 

Adjusted operating income

$

361,042

 

 

 

$

86,644

 

 

 

24.0

%

Reconciliation of Consolidated Income before Income Taxes to Pre-tax Adjusted Operating Income

(Dollars in millions)

 

(Unaudited)

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Income before income taxes

$

482

 

 

 

$

195

 

 

 

$

668

 

 

 

$

99

 

 

Reconciliation to pre-tax adjusted operating income:

 

 

 

 

 

 

 

Capital (gains) losses, derivatives and other, included in investment related gains/losses, net

(104

)

 

 

31

 

 

 

(332

)

 

 

(37

)

 

Capital (gains) losses on funds withheld, included in investment income, net of related expenses

(1

)

 

 

(3

)

 

 

(2

)

 

 

(5

)

 

Embedded derivatives:

 

 

 

 

 

 

 

Included in investment related gains/losses, net

1

 

 

 

(108

)

 

 

(67

)

 

 

250

 

 

Included in interest credited

(3

)

 

 

7

 

 

 

(33

)

 

 

19

 

 

DAC offset, net

(2

)

 

 

(21

)

 

 

10

 

 

 

(108

)

 

Investment (income) loss on unit-linked variable annuities

(2

)

 

 

(15

)

 

 

(1

)

 

 

1

 

 

Interest credited on unit-linked variable annuities

2

 

 

 

15

 

 

 

1

 

 

 

(1

)

 

Interest expense on uncertain tax positions

3

 

 

 

4

 

 

 

6

 

 

 

8

 

 

Non-investment derivatives and other

(15

)

 

 

4

 

 

 

(4

)

 

 

1

 

 

Pre-tax adjusted operating income

$

361

 

 

 

$

109

 

 

 

$

246

 

 

 

$

227

 

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Income to Pre-tax Adjusted Operating Income

(Dollars in millions)

 

(Unaudited)

Three Months Ended June 30, 2021

 

Pre-tax income
(loss)

 

Capital
(gains) losses,
derivatives
and other, net

 

Change in
value of
embedded
derivatives, net

 

Pre-tax adjusted
operating
income (loss)

U.S. and Latin America:

 

 

 

 

 

 

 

Traditional

$

135

 

 

 

$

 

 

 

$

(1

)

 

 

$

134

 

 

Financial Solutions:

 

 

 

 

 

 

 

Asset-Intensive

163

 

 

 

(47

)

 

(1)

10

 

 

(2)

126

 

 

Capital Solutions

23

 

 

 

 

 

 

 

 

 

23

 

 

Total U.S. and Latin America

321

 

 

 

(47

)

 

 

9

 

 

 

283

 

 

Canada Traditional

32

 

 

 

2

 

 

 

 

 

 

34

 

 

Canada Financial Solutions

4

 

 

 

 

 

 

 

 

 

4

 

 

Total Canada

36

 

 

 

2

 

 

 

 

 

 

38

 

 

EMEA Traditional

(12

)

 

 

 

 

 

 

 

 

(12

)

 

EMEA Financial Solutions

83

 

 

 

 

 

 

 

 

 

83

 

 

Total EMEA

71

 

 

 

 

 

 

 

 

 

71

 

 

Asia Pacific Traditional

(12

)

 

 

 

 

 

 

 

 

(12

)

 

Asia Pacific Financial Solutions

31

 

 

 

(11

)

 

 

 

 

 

20

 

 

Total Asia Pacific

19

 

 

 

(11

)

 

 

 

 

 

8

 

 

Corporate and Other

35

 

 

 

(74

)

 

 

 

 

 

(39

)

 

Consolidated

$

482

 

 

 

$

(130

)

 

 

$

9

 

 

 

$

361

 

 

(1)

Asset-Intensive is net of $(13) DAC offset.

(2)

Asset-Intensive is net of $11 DAC offset.

(Unaudited)

Three Months Ended June 30, 2020

 

Pre-tax income
(loss)

 

Capital
(gains) losses,
derivatives
and other, net

 

Change in
value of
embedded
derivatives, net

 

Pre-tax adjusted
operating
income (loss)

U.S. and Latin America:

 

 

 

 

 

 

 

Traditional

$

(158

)

 

 

$

 

 

 

$

(7

)

 

 

$

(165

)

 

Financial Solutions:

 

 

 

 

 

 

 

Asset-Intensive

93

 

 

 

81

 

 

(1)

(111

)

 

(2)

63

 

 

Capital Solutions

24

 

 

 

 

 

 

 

 

 

24

 

 

Total U.S. and Latin America

(41

)

 

 

81

 

 

 

(118

)

 

 

(78

)

 

Canada Traditional

44

 

 

 

(4

)

 

 

 

 

 

40

 

 

Canada Financial Solutions

4

 

 

 

 

 

 

 

 

 

4

 

 

Total Canada

48

 

 

 

(4

)

 

 

 

 

 

44

 

 

EMEA Traditional

16

 

 

 

 

 

 

 

 

 

16

 

 

EMEA Financial Solutions

98

 

 

 

(19

)

 

 

 

 

 

79

 

 

Total EMEA

114

 

 

 

(19

)

 

 

 

 

 

95

 

 

Asia Pacific Traditional

47

 

 

 

 

 

 

 

 

 

47

 

 

Asia Pacific Financial Solutions

26

 

 

 

(14

)

 

 

 

 

 

12

 

 

Total Asia Pacific

73

 

 

 

(14

)

 

 

 

 

 

59

 

 

Corporate and Other

1

 

 

 

(12

)

 

 

 

 

 

(11

)

 

Consolidated

$

195

 

 

 

$

32

 

 

 

$

(118

)

 

 

$

109

 

 

(1)

Asset-Intensive is net of $(4) DAC offset.

(2)

Asset-Intensive is net of $(17) DAC offset.

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Income to Pre-tax Adjusted Operating Income

(Dollars in millions)

 

(Unaudited)

Six Months Ended June 30, 2021

 

Pre-tax income
(loss)

 

Capital
(gains) losses,
derivatives
and other, net

 

Change in
value of
embedded
derivatives, net

 

Pre-tax adjusted
operating
income (loss)

U.S. and Latin America:

 

 

 

 

 

 

 

Traditional

$

(203

)

 

 

$

 

 

 

$

(7

)

 

 

$

(210

)

 

Financial Solutions:

 

 

 

 

 

 

 

Asset-Intensive

223

 

 

 

8

 

 

(1)

(56

)

 

(2)

175

 

 

Capital Solutions

46

 

 

 

 

 

 

 

 

 

46

 

 

Total U.S. and Latin America

66

 

 

 

8

 

 

 

(63

)

 

 

11

 

 

Canada Traditional

56

 

 

 

1

 

 

 

 

 

 

57

 

 

Canada Financial Solutions

10

 

 

 

 

 

 

 

 

 

10

 

 

Total Canada

66

 

 

 

1

 

 

 

 

 

 

67

 

 

EMEA Traditional

(80

)

 

 

 

 

 

 

 

 

(80

)

 

EMEA Financial Solutions

143

 

 

 

(18

)

 

 

 

 

 

125

 

 

Total EMEA

63

 

 

 

(18

)

 

 

 

 

 

45

 

 

Asia Pacific Traditional

29

 

 

 

 

 

 

 

 

 

29

 

 

Asia Pacific Financial Solutions

59

 

 

 

(20

)

 

 

 

 

 

39

 

 

Total Asia Pacific

88

 

 

 

(20

)

 

 

 

 

 

68

 

 

Corporate and Other

385

 

 

 

(330

)

 

 

 

 

 

55

 

 

Consolidated

$

668

 

 

 

$

(359

)

 

 

$

(63

)

 

 

$

246

 

 

(1)

Asset-Intensive is net of $(27) DAC offset.

(2)

Asset-Intensive is net of $37 DAC offset.

(Unaudited)

Six Months Ended June 30, 2020

 

Pre-tax income
(loss)

 

Capital
(gains) losses,
derivatives
and other, net

 

Change in
value of
embedded
derivatives, net

 

Pre-tax adjusted
operating
income (loss)

U.S. and Latin America:

 

 

 

 

 

 

 

Traditional

$

(220

)

 

 

$

 

 

 

$

 

 

$

(220

)

 

Financial Solutions:

 

 

 

 

 

 

 

Asset-Intensive

55

 

 

 

(109

)

 

(1)

160

 

(2)

106

 

 

Capital Solutions

47

 

 

 

 

 

 

 

 

47

 

 

Total U.S. and Latin America

(118

)

 

 

(109

)

 

 

160

 

 

(67

)

 

Canada Traditional

67

 

 

 

9

 

 

 

 

 

76

 

 

Canada Financial Solutions

7

 

 

 

 

 

 

 

 

7

 

 

Total Canada

74

 

 

 

9

 

 

 

 

 

83

 

 

EMEA Traditional

33

 

 

 

 

 

 

 

 

33

 

 

EMEA Financial Solutions

128

 

 

 

(13

)

 

 

 

 

115

 

 

Total EMEA

161

 

 

 

(13

)

 

 

 

 

148

 

 

Asia Pacific Traditional

71

 

 

 

 

 

 

 

 

71

 

 

Asia Pacific Financial Solutions

1

 

 

 

21

 

 

 

 

 

22

 

 

Total Asia Pacific

72

 

 

 

21

 

 

 

 

 

93

 

 

Corporate and Other

(90

)

 

 

60

 

 

 

 

 

(30

)

 

Consolidated

$

99

 

 

 

$

(32

)

 

 

$

160

 

 

$

227

 

 

(1)

Asset-Intensive is net of $1 DAC offset.

(2)

Asset-Intensive is net of $(109) DAC offset.

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Per Share and Shares Data

(In millions, except per share data)

 

(Unaudited)

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Earnings per share from net income:

 

 

 

 

 

 

 

Basic earnings per share

$

5.06

 

 

$

2.49

 

 

$

7.11

 

 

$

1.12

 

Diluted earnings per share

$

5.02

 

 

$

2.48

 

 

$

7.06

 

 

$

1.11

 

 

 

 

 

 

 

 

 

Diluted earnings per share from adjusted operating income

$

4.00

 

 

$

1.36

 

 

$

2.78

 

 

$

2.78

 

Weighted average number of common and common equivalent shares outstanding

68,533

 

 

63,749

 

 

68,460

 

 

63,298

 

(Unaudited)

At June 30,

 

2021

 

2020

Treasury shares

17,314

 

 

17,375

 

Common shares outstanding

67,997

 

 

67,936

 

Book value per share outstanding

$

197.72

 

 

$

184.78

 

Book value per share outstanding, before impact of AOCI

$

138.29

 

 

$

128.82

 

Reconciliation of Book Value Per Share to Book Value Per Share Excluding AOCI

 

(Unaudited)

At June 30,

 

2021

 

2020

Book value per share outstanding

$

197.72

 

 

 

$

184.78

 

 

Less effect of AOCI:

 

 

 

Accumulated currency translation adjustments

(0.29

)

 

 

(3.09

)

 

Unrealized appreciation of securities

60.78

 

 

 

60.19

 

 

Pension and postretirement benefits

(1.06

)

 

 

(1.14

)

 

Book value per share outstanding, before impact of AOCI

$

138.29

 

 

 

$

128.82

 

 

Reconciliation of Stockholders' Average Equity to Stockholders' Average Equity Excluding AOCI

(Dollars in millions)

 

(Unaudited)

 

Trailing Twelve Months Ended June 30, 2021:

Average Equity

Stockholders' average equity

$

13,131

 

 

Less effect of AOCI:

 

Accumulated currency translation adjustments

(102

)

 

Unrealized appreciation of securities

4,276

 

 

Pension and postretirement benefits

(75

)

 

Stockholders' average equity, excluding AOCI

$

9,032

 

 

Reconciliation of Trailing Twelve Months of Consolidated Net Income to Adjusted Operating Income and Related Return on Equity

(Dollars in millions)

 

(Unaudited)

 

 

Return on Equity

Trailing Twelve Months Ended June 30, 2021:

Income

 

Net Income

$

828

 

 

 

6.3

%

Reconciliation to adjusted operating income:

 

 

 

Capital (gains) losses, derivatives and other, net

(229

)

 

 

 

Change in fair value of embedded derivatives

(233

)

 

 

 

Deferred acquisition cost offset, net

87

 

 

 

 

Tax expense on uncertain tax positions

57

 

 

 

 

Adjusted operating income

$

510

 

 

 

5.7

%

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollars in millions)

(Unaudited)

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

Net premiums

$

3,098

 

 

$

2,790

 

 

$

6,012

 

 

$

5,609

 

Investment income, net of related expenses

759

 

 

645

 

 

1,571

 

 

1,239

 

Investment related gains (losses), net

112

 

 

81

 

 

414

 

 

(204)

 

Other revenue

168

 

 

90

 

 

259

 

 

166

 

Total revenues

4,137

 

 

3,606

 

 

8,256

 

 

6,810

 

Benefits and expenses:

 

 

 

 

 

 

 

Claims and other policy benefits

2,813

 

 

2,700

 

 

6,005

 

 

5,364

 

Interest credited

218

 

 

187

 

 

364

 

 

333

 

Policy acquisition costs and other insurance expenses

339

 

 

290

 

 

672

 

 

538

 

Other operating expenses

240

 

 

188

 

 

454

 

 

383

 

Interest expense

43

 

 

42

 

 

88

 

 

83

 

Collateral finance and securitization expense

2

 

 

4

 

 

5

 

 

10

 

Total benefits and expenses

3,655

 

 

3,411

 

 

7,588

 

 

6,711

 

Income before income taxes

482

 

 

195

 

 

668

 

 

99

 

Provision for income taxes

138

 

 

37

 

 

185

 

 

29

 

Net income

$

344

 

 

$

158

 

 

$

483

 

 

$

70

 

 

Investor Contact
Jeff Hopson
Senior Vice President - Investor Relations
(636) 736-2068

Source: Reinsurance Group of America, Incorporated